Former President of the USA, Barak Obama once said, “A budget is more than just a series of numbers on a page; it is an embodiment of our values.” One cannot agree more, especially for a country like India which has come over a long way from being one of the most backward economies of the world to being one of the fastest-growing economies in a matter of some decades.
A budget is not merely a ‘bahi-khata’ where the records of the money earned and money to be spent is kept. It reflects the philosophy of the Government of the day. It also enlightens us about the ideological thought process of the Governing elites, their priorities as a Government, their core concerns, and the means they prefer to adopt for ensuring the generation, distribution and utilization of wealth and income.
Recently, the Finance Minister of India, Smt. Nirmala Sitaraman presented the Union Budget of 2023-34 in front of the Parliament. As the country entered the ‘Amrit Kaal’ or the 25-year tenure till 2047 when we would celebrate hundred years of our Independence, there was a lot of discussion about this budget.
This was the last full budget of the Modi Government as the country would go to Lok Sabha elections in 2024 and therefore an interim budget would be presented by the finance minister next year. Being the ‘budget of the election year’, there were speculations that Finance Minister Nirmala Sitaraman would announce a slew of schemes that would be populist in nature and would reflect more on the revenue expenditure.
By doing so, she would have earned a lot of praise from a section of the media as well as society for bending more towards the ‘entitlement’ and ‘freebie’ side. But this is where she reflected clearly the ideology of the Modi Government. If there is one word that summarises the philosophy of not just the budget of 2023, but all the budgets of the Modi Government, it is – ‘empowerment’.
From 2004 till 2014, the UPA Government, through its budget and schemes adopted the philosophy of ‘entitlement’ wherein an individual was entitled with so many rights including that of work (MGNREGA), food, education etc. Although this philosophy of entitlement sounds good and very much ‘pro-people’ when analysed in a vacuum, after all, everyone loves to have more and more rights. But there are four key problems associated with this philosophy of entitlement.
First, it creates a “Maai-Baap” attitude under which the state elites that give these rights to the people feel themselves above the masses, somewhat like a master and a slave. The second problem is that since the rights are provided by these elites, they also have to power to decide how much rights are to be given and to whom and when to withdraw them altogether. Not to miss out on the massive corruption that these rights have the potential to breed in. The third problem is that it fails to produce long-term durable assets. And the fourth problem is that it doesn’t help in ensuring the generation of money required for fulfilling these entitlements.
On the other hand, the Modi Government has, from the very beginning, focused on the empowerment of the people. Empowerment means teaching them how to catch the fish instead of giving the fish itself. And this is being done by providing citizens with market-oriented skills, requisite capital/loans for opening up businesses and expanding their agricultural production, providing affordable houses and sanitation facilities and creating long-term durable assets like infrastructure, roads, highways, railways, metros, ports, etc.
It is interesting to note that the idea of ‘Saptarishi’ or the seven priorities of the Government that has been pointed out in the budget has only been formulated as a concept in this budget, although the essence of its elements has been there since Modi govt launched its first budget in 2014. Be it women empowerment, Youth Power or about inclusive growth, all the budgets of last year have worked to move in this very direction through schemes like Jan Dhan yojna, Stand Up India, Skill India, Ayushman Bharat, PM Awas Yojna etc
For a very long the capital expenditure was neglected in India for focusing on the revenue expenditure, something that doesn’t helps in creating long terms assets. Remember, every rupee spent on capital expenditure has a multiplier effect of Rs 2.45 in the immediate year, and Rs 3.14 in the following years. Finance Minister declared during her Budget address that the Government will boost the capital investment outlay by 33 per cent to Rs 10 lakh crore, which would be 3.3 per cent of GDP.
The expenditure on infrastructure will set into motion the capex multiplier effect. It helps in creating jobs in labour-intensive sectors cement and steel industries that support in putting more money into the hands of the people through their work instead of some dole by the Government. A capital outlay of Rs 2.40 lakh crore has been provided for the Railways, which will help in lowering the logistic cost and ensuring more jobs in this sector (both direct as well as indirect). To ensure ease of living and ensuring houses for all, the Outlay for PM Awas Yojana is being enhanced by 66 per cent to over Rs 79,000 crores.
The conventional wisdom argues that growth in the economy would lead to more harm to the environment as it would increase carbon emissions and greenhouse gases. It is worth noting that India is becoming one of the fastest-growing major economies of the world, while also being among the frontrunner who has ensured maximum compliance with the Paris deal on Climate Change. Focus on climate resilient ‘millet’ crop, PM-PRANAM, Green Hydrogen Mission and MISHTI etc. are some of the schemes of the budget which shows the resolve of the Modi Government to ensure even the ‘empowerment of the environment’. The key element of inclusive growth, i.e., equity, has also not been missed out while ensuring growth. Skill India, PMAY, PM Swanidhi yojna PM Poshan Abhiyan etc are a testimonial to this commitment.
It is interesting to note that the idea of ‘Saptarishi’ or the seven priorities of the Government that has been pointed out in the budget has only been formulated as a concept in this budget, although the essence of its elements has been there since Modi govt launched its first budget in 2014. Be it women empowerment, Youth Power or about inclusive growth, all the budgets of last year have worked to move in this very direction through schemes like Jan Dhan yojana, Stand Up India, Skill India, Ayushman Bharat, PM Awas Yojna etc.
We are perhaps among the only major economies of the world that has pretty well managed to balance our “economy” with the “ecology”, without even compromising on the ‘equity’. Interestingly, all three eventually lead to the empowerment of the marginalised section of society. There cannot be distribution of wealth till there is generation of it. And our growth rate and as well as the ever-expanding GDP are a clear proof of it.
Miles to go…
The Government has done well to produce a budget that caters into the needs of long term without neglecting the short term requirements. The first budget of this Amrit Kaal has clearly laid the roadmap for 2047, the 100th year of our independence and the year by which we aspire to become a developed country.
The need, however is to ensure that the policies and schemes of the Government do not become a victim of red tapism and bureaucratic mismanagement, as is usually the case in India. In recent times, it has become certain that uncertain geopolitical circumstances (like Russia-Ukraine conflict) and threats from natural disaster (earthquake in Syria and Turkey) are two factors that can have and will also have in the future a crucial bearing on our developmental journey. And therefore, the need of the hour is that these factors must be necessarily accounted for by the Government before taking any policy decision.
(The writer is a Phd candidate at the School of International Studies, JNU)